Rice Weekly Research Report 28 th Nov, 2016

Transcription

1 Rice Weekly Research Report Contents Outlook and Review Weekly Price Change Weekly Rice Export Progressive Procurement FOB-1121 Steam International Rice Market Summary IGC Balance Sheet CBOT Trend

2 Outlook and Review: Domestic Front Wholesale Prices for India as an average for 04 th week of November traded firmed by 0.36% from last week. Prices are currently hovering at Rs /quintal and 7.36% up from price of Rs.2635Quintal during corresponding period last year. Agriwatch expects rice market to move in firm tone as cash crunch in the market and thus arrival is lower than previous week. Total Rice exported from India in the month of October was 5.98 lakh tons out of which basmati rice contribute 36.54%, and non-basmati rice is 63.45% in this period with quantity of around 2.18 lakh tons and 3.80 lakh tons respectively as per latest data extract from IBIS. Rabi rice sowing is going on and as on 25 November, total area under rabi paddy is 6.82 lakh hectare which is 2.42% down from last year area of 9.10 lakh hectare and around 3% up from normal average area as on date of 9.23 lakh hectare. As per 01st Advance Estimate released by Union Agriculture Minister, Total production of Kharif rice is estimated at million tons which is a new record. This year rice production is higher by 1.1 million tons than previous record production of million tons achieved during Production of Kharif rice is also higher by 4.16 million tons and 2.57 million tons over the average production of the last five years and the last year s Kharif rice production respectively. Farmers in Bhatinta district of punjab, who are waiting for the procurement of their paddy at grain markets, have been left in the lurch as they have not received payment for their paddy due to demonetization of Rs 500 and 1,000 notes. The farmers are getting payment through arhtiyas or commission agents at a snail s pace due to the same. However according to mandi officer, procurement process is going on at a good pace and we have procured about lakh metric tonnes of paddy, of which lakh metric tonnes of paddy has been lifted. Today about 5,686 metric tonnes arrived, of which we have procured 3,613 metric tonnes of paddy. At some grain markets, especially at the Talwandi Sabo grain markets, the problem has been witnessed but this is for a short term. The whole paddy will be procured very soon. Among the food grains, the inflation for Cereals has increased to 7.23% from the previous month s level of 7.03%, Rice to 7.76% from the previous month s level of 4.08% and Wheat 7.27% from the previous month s level of 6.90%. The inflation for Pulses has decreased to 34.55% from the previous month s level of 35.76%. India s rice stocks in the central pool as on October 1, 2016 stood at around million tons up by about 6.56% from around million tons recorded during the corresponding period last year, according to data from the Food Corporation of India (FCI). India's rice stocks in the central pool are down about 19% from around million tons recorded on September-01, The current rice stocks are about one million tons more than the required strategic reserve norms of around 1.25 million tons for this time of the year, according to the FCI. In the post monsoon season, at All-India level, the rainfall during the week (10th 16th November, 2016) has been 87% lower than the Long Period Average (LPA). Rainfall in the four broad geographical divisions of the country during the above period has been lower than LPA by 98% in East & North East India, 99% in North West India, 94% in Central India and 80% in South Peninsula and.

3 Agriwatch Cereals Commodity Indices Nov-06, 2016 The Agriwatch Agri Commodities Index gained 1.54% to during the week ended Nov 26, 2016 from during the previous week. The base for the Index and all sub-indices is 2014 (= 100). Seven of the nine commodity group sub-indices that constitute the main Index gained during the week, led by Cereals and Spices. Vegetables and Sweeteners were the only declining sub-indices. The commodity group sub-index values and their weekly changes are as follows: Cereals Index: (+1.58%), Pulses Index: (+0.67%), Vegetables Index: (-0.97%), Edible Oils Index: (+0.57%), Oilseeds Index: (+2.03%), Spices Index: (+5.05%), Sweeteners Index: (-0.11%), Fibres Index: (+8.76%) and Other Non-Food Articles Index: (+5.78%). "Agriwatch has recently launched its AW Agri Commodity Indices to enable organizations access independent Indices to track and use to benchmark their purchases and sales. The Indices are based on the daily prices in the key benchmark markets for each commodity that AW has been coverin g for the past decade. The indices include an Aggregate Index, Category Indices and individual commodity indices. The weekly indices are free to access on our website wwwagriwatch.com. The daily indices are available on subscription. Please contact for more details." State wise Wholesale Prices weekly for 04 th Week of Nov-2016 Source Agmarknet State Prices Nov 2016 Prices Nov 2016 Prices Nov 2015 % Change(Over Previous Week) % Change(Over Previous Year) Andhra Pradesh Assam Bihar Gujarat Jharkhand Karnataka Kerala

4 Maharashtra Manipur Meghalaya Delhi Orissa Punjab Tripura Uttar Pradesh Uttrakhand West Bengal Average Rice Weekly Research Report Price Projection for December 01 st Week in Domestic Market Duration Trend Average Price Range Reason 01 st Week of Dec, 2016 Steady to Firm Rs /Q Non-basmati rice market likely to move steady to firm note in coming weeks due to lower arrival as cash crunch in the market. Weekly Price Change of 1121 Steam, Raw and Sella Rice Price Delhi Market (Figure: in Rs. /Quintal) 1121 Steam, Raw and Sella Rice Price Delhi Market Variety 26-Nov- 2016) 19-Nov- 2016) Month Ago(26-Oct- 2016) % ch. From last week % Change from last Month 1121 Steam Sella Raw Weekly Price (FOB) Change of Rice 5% broken high quality (Figure in USD/ MT): Variety Indian White Rice 5%, 25% High Quality, Long grain parboiled 5% 26-Nov- 2016) 19-Nov- 2016) Month Ago(26-Oct- 2016) % ch. From last week % Change from last Month White Rice 5% White Rice 25% Parboiled 5%

5 Major Importers of Basmati & Non-Basmati Rice in Oct Non-Basmati Rice Basmati Rice Country Quantity(Tons) Average of FOB $/Ton Country Quantity(Tons) Average of FOB $/Ton INDONESIA SAUDI IRAQ U A E GUINEA IRAQ BENIN IRAN GHANA U S A S.AFRICA QATAR U A E BAHRAIN DJIBOUTI TURKEY SAUDI KUWAIT SINGAPORE U K Others Others Grand Total Grand Total Total Rice exported from India in the month of October was 5.98 lakh tons out of which basmati rice contribute 36.54%, and non-basmati rice is 63.45% in this period with quantity of around 2.18 lakh tons and 3.80 lakh tons respectively as per latest data extract from IBIS.Major importers of Indian Basmati rice in this period were Saudi, UAE and Iraq. We expect Middle East countries to remain the major basmati buyers of Indian Basmati from Mundra and Kakinada Port in coming months. Major non-basmati importers were Indonesia, Iraq and Guinea. Monthly rice exports were down by 6.82% from last month export of 6.35 lakh tons. Major Non-Basmati Export Sourcing Center Total non-basmati Rice export in the month of Oct was 3.80 lakh tons. Kakinada Sea, Vizag Sea and Mundra port were the major ports for non-basmati rice export during this period. These five ports cover approx 80% of total export in this period.

6 Major Basmati Export Sourcing Center Total basmati Rice export in the month of Oct was 2.18 lakh tons. Mundra Sea, Kandla ICD and Loni ICD were the major port for basmati rice export center during this period. These three ports cover more than 90% of total export in this period. State wise Progressive Procurement State/UTs (in Lakh T) Total procurement in marketing season (Oct. Sept.) Progressive Procurement as on In Marketing season AP In Marketing season Telangana Bihar Chhattisgarh Haryana Kerala M.P Maharashtra Odessa Punjab Tamilnadu U.P Uttrakhand West Bengal Others Total Government's rice procurement has increased around 12.54% to million tons in the marketing year so far, despite prospects of lower production due to poor monsoon. The Centre has kept rice procurement target of 30 million tons for the current marketing year, which started in October-2015 and has also exceeded the target as of now. These agencies had procured million tons a year-ago, while the total purchases had reached 32 million

7 tons. At present, procurement has been completed in Punjab and Haryana which is up by 20% and 41% respectively with quantity of lakh tons and lakh tons, while the operations are in full swing in Uttar Pradesh, Chhattisgarh, Andhra Pradesh and Telangana. As per the Government's latest data, rice procurement in Uttrakhand has risen to 5.97 lakh tons so far this year as against 4.65 lakh tons a year-ago. Procurement in Chhattisgarh increased to lakh tons from lakh tons, while that of Andhra Pradesh has increased to lakh tons from lakh tons in Rice purchase in Telangana and Bihar was lagging behind at lakh tons and lakh tons so far this year as against lakh tons and lakh tons respectively in the corresponding period of the marketing year. Telangana rice production is also likely to fall by 35% from last year production of 4.54 million tons. Global Updates Thai rice export prices hovered around 13-month lows over the past week, attracting more African buyers and leading to dull trade in Vietnam. Currently Thai benchmark 5 percent broken rice prices hovered in between $345-$348 /Ton, free-on-board (FOB) basis, from $345-$350 /Ton a week ago when they hit their lowest in 13 months. As per market sources, the rainy season may also have an impact on rice prices, The recent rain will prompt farmers to harvest more rice as they fear that their rice will get spoiled and this might have an effect on rice prices. The fall in Thai rice prices has raised concerns among Vietnamese exporters of the grain, as their quotations for the 5 percent broken rice stood at $350/Ton, FOB basis, against $350-$355 last week. Thai rice prices are falling and that could attract African buyers while Vietnam could not do anything because their rice stock has been built at an already high cost. As per trade sources, last week African buyers had already switched to rice offered by Thailand and Pakistan. Mali produced a record 2.81 million tonnes of rice in its season, up 20 percent from last year and above an initial crop forecast. The West African country produced 2.33 million tonnes of unprocessed paddy rice last season and forecast 2.71 million tonnes for It now has a projected surplus of 565,000 tonnes. The increase was due to good rainfall, an increase in cultivated areas, the modernization of farming equipm ent and fertilizer subsidies. Mali is Africa's second largest rice producer behind Nigeria. The rice season includes a production phase from May/June to September/October followed by a marketing phase from October/November to the end of March. Bangladesh rice production in is forecast marginally lower at million metric tons (MMT) on estimated lower planting (11.7 million hectares). Based on the latest customs data, MY 2015/16 rice imports are lowered to 0.22 MMT. MY 2016/17 rice imports are also revised lower to 0.15 MMT on sufficient domestic supplies and uncompetitive imports due to the government decision to raise import duty to 25 percent. The Philippines paddy rice output is now expected to hit million tons in 2016, the lowest in th ree years and below a July forecast of million tons, due to crop losses from an El Niño dry spell and typhoons. The Philippines, one of the world s biggest rice importers, could buy another 250,000 tons of rice in addition to the 250,000 tons purchased recently from Vietnam and Thailand, if it sees a need to boost state buffer stocks. The latest forecast from the Philippine Statistics Authority for output this year is 1.3% lower than a 2015 harvest of million tons, which followed record production of million tons in 2014.

8 FOB Quotes Aromatic Rice (1121 Steam) Source-FAO& Agriwatch Indian FOB for 1121 steam in the month of October moved steady from last month and currently is in the range of USD /MT which is almost same from last month price of 802USD/T. Average basmati rice price steady even with arrival pressure as aromatic rice production estimates is 25-30% lower than last year. Pakistani basmati price has also moved steady USD 862.5/MT to 936$/MT, according to the UN's Food and Agriculture Organization (FAO). Currently Pakistani basmati FOB is hovering in the range of USD /MT which is down by 1.31% from last month FOB of USD 836/MT. IGC Rice Balance Sheet (Fig. In Million Tonnes) Attributes ( Fig in Million Tons) Estimate Forecast Projection Projection ( ) Production Trade Consumption Carryover stocks Y-O-Y change Major Exporters Note: Major exporters are India, Pakistan, Thailand, Vietnam, and United States IGC Rice Balance sheet Highlights Reflecting upgraded outlooks for some Asian producers, including India, world rice output in 2016/17 is increased by 2m t, to a record of 484m, up by 3% y/y. And with anticipated total use unchanged m/m, the increase is mostly absorbed through a higher figure for stocks; at about 117m t, global inventories are predicted to climb by 2% y/y as a

9 fall in the major exporters is more than offset by accumulation elsewhere. The prediction of trade in 2017 is lifted slightly, to around 41mt, but is little changed from the previous year. Should weather patterns be mostly favorable in the coming months, especially in Asia, the 2016/17 world rice outturn could be 3% larger y/y and the biggest on record. Against the backdrop of heavy supplies, consumption is seen at a new peak, while inventories are expected to expand by 2% y/y, to 117m t. Within the total, major exporters stocks could diminish marginally on another fall in Thailand s reserves, but increases in other countries, including China, are anticipated. Global trade is projected broadly steady y/y in 2017 on solid buying interest from importers in Asia and Africa. India is expected to remain the world s top exporter of rice for the sixth successive year. IGC Forecast the World Rice Production Up in In its October 2016 Grain Market Report (GMR), the International Grains Council (IGC) forecasts global rice production at around 484 million tons, up about 2 % from an estimated 473 million tons in on improved Asian production. Global Trade of Rice Unchanged from Last Month The IGC forecasts global rice trades at around 41 million tons, unchanged from its estimates for It expects world rice trade in 2017 to increase on high demand from buyers in Africa and Asia. Global Consumption of Rice Decreases in The IGC forecasts global rice consumption to up about 1.90% to around 482 million tons from an estimated 473 million tons in Rice Price CBOT November- 16, Rough Rice) (Prices in US$/hundredweight) Market Analysis The CBOT November month rough chart for rice indicates range bound with some weak movement in last couple of weeks; overall market is in steady to weak tone. We expect market to hover in the range of USD hundred weights in coming sessions.

10 Price Projection (International-CBOT) Duration Trend Price Range 01 st Week of December,2016 Steady USD/ Hundred Weight ***** Discla ime r The information and opinions contained in the document have been compiled from sources believed to be reliable. The company does not warrant its accuracy, completeness and correctness. Use of data and information contained in this report is at your own risk. This document is not, and should not be construed as, an offer to sell or solicitation to buy any commodities. This document may not be reproduced, distributed or published, in whole or in part, by any recipient hereof for any purpose without prior permission from the Company. IASL and its affiliates and/ or their officers, directors and employees may have positions in any commodities mentioned in this document (or in any related investment) and may from time to time add to or dispose of any such commodities (or investment). Please see the detailed disclaimer at / Disclaimer.asp 2016 Indian Agribusiness Systems Pvt Ltd.